Black Money In Real Estate: Two In Three Indians Used Cash To Pay Part Of Property Deal, Says Survey

The use of cash remains deeply entangled in the Indian real estate sector, with two in three citizens or roughly 66% who purchased property in the last three years admitting to paying a portion of the transaction value in cash, according to a survey by LocalCircles.

The survey, that polled over 39,000 citizens across 301 districts, highlights the use of black money and alleged corruption across the property buying process. The data shows that the amount of cash involved is significant.

Over a quarter of respondents or 26% reported paying over half of the property amount in cash, suggesting widespread undervaluation to evade taxes and registration fees.

Another 19% paid between 30% and 50% of the value in cash, it said. Beyond the black money component, the survey also points to the alleged graft within the regulatory system.

A notable 44% of property buyers confirmed paying a "bribe" to three or more agencies or individuals during the purchase process, according to LocalCircles.

The survey suggests that the problem's roots lie in regulatory friction and the objective of tax evasion, which have increased under-the-table dealings.

Notably, during 2024–25 financial year, through 465 survey operations, the Income Tax (I-T) Department detected Rs 30,444 crore in undisclosed income or black money, according to data shared in the Parliament.

According to LocalCircle's findings, metropolitan areas may have seen some decline in cash transactions thanks to digital reforms in new projects, the smaller towns remain hotbeds for non-transparent transactions.

"To summarise, nine years after demonetisation, black money continues to be the unspoken currency driving India’s real estate sector," LocalCircles said in its release.